As the first autonomous trucking software company to go public, TuSimple Holdings is earning Wall Street credibility. Most analysts offer positive commentary on the 5-year-old startup.
They appear fixated on the company’s plan to remove the driver from Class 8 semis on night runs covering 113 miles on Interstate 10 between Phoenix and Tucson, Arizona. On TuSimple’s first earnings call Monday, questions about the pilot — the holy grail of autonomous trucking — piled up.
“It’s not a PR stunt,” TuSimple President and CEO Cheng Lu said. “We intend this to run over several weeks. We’ll be hauling real commercial cargo. The selective route includes nearly all the scenarios in typical freight operations, terminals, surface streets and highways passing through city centers and urban areas.”
Level 4 high-autonomy software is designed to operate without human intervention in most cases. Without a driver in the truck, unusual events — so-called edge cases — would be up to the robotic truck to work through. With no human on board, driver takeovers, known as disengagements, will be impossible.
“Given the consequences of [a] safety incident on the highway, the overall reliability threshold must be higher in the truck,” Lu said. “Unlike a passenger car that drives at lower speeds in an urban setting, a truck cannot just come to an emergency stop in the middle of the road.”
The runs will occur at night because that is when a lot of freight moves. It also will validate TurSimple’s dedication to using cameras to see ahead instead of lidar, a detection system that works like radar but uses light from a laser.
Rivals as critics
Some of TuSimple’s rivals criticize the driver-out pilot as premature, suggesting redundancy in systems like braking and steering lack the development to let the truck run without human supervision. They do not mention TuSimple by name.
“Those who try to rush it, who may be trying to do stuff before they have the proper redundancy in their system and get out there, are not doing it safely and responsibly,” Don Burnette, co-founder and CEO of Kodiak Robotics, told FreightWaves.
David Liu, co-founder and CEO of Plus, a well-financed startup that signed a deal this week to go public through a special purpose acquisition company (SPAC), told FreightWaves in March that 10 billion miles of running its Level 4 software under human supervision would be needed to safely remove the driver. The company revised that downward to 8 billion miles this week.
TuSimple is forging ahead. It has accumulated about 3.7 million miles of testing revenue-generating freight deliveries in trucks with safety drivers on board. TuSimple operates a fleet of 70 trucks — 50 in the U.S. and 20 in China. It planned to add 25 more trucks in March. Supply chain disruptions by Navistar have delayed delivery until June or July.
“We’re going to ensure safety above all else,” Lu said. “We’re in phase three of a four-phase approach. We are bringing up our autonomous trucks, 10 of them for a purpose built for our project, which is fully redundant.”
By the numbers
As the quarter ended before its April IPO, TuSimple reported cash on hand of $509 million, including $183 million in proceeds from the sale of stock warrants issued to Navistar and its parent, TRATON SE, the German-based truck holding company of Volkswagen AG.
TuSimple brought in just over $1 billion in proceeds from its April IPO, giving it about $1.5 billion in total cash.
“While we considered several options to become the first publicly traded autonomous vehicle company, we chose the traditional IPO path to be as transparent as possible,” Chief Financial Officer Patrick Dillon said.
First-quarter revenue of $944,000 was four times greater than the year-ago period. Dillion said TuSimple expects to generate $5 million to $7 million in revenue for the full year.
Freight revenue itself is less important than its role in helping “develop our technology in real-world on-road applications and build commercial relationships with long-term customers,” Dillon said.
TuSimple covered 700,000 miles and made deliveries to 25 Autonomous Freight Network terminals during the quarter. The company operated from four dedicated terminals and launched commercial lanes from Dallas to Austin and Dallas to San Antonio, Texas.
The company plans to expand to the East Coast by the end of the year and add a fifth terminal in Fort Worth, Texas, during Q2.
TuSimple said Monday it has 6,775 nonbinding reservations with about a dozen major fleets for a Level 4 International LT equipped with TuSimple’s software stack. Each expression of interest requires a $500 deposit. Customers include U.S. Xpress Inc. (NYSE: USX), Schneider National (NYSE: SNDR) and Penske Truck Leasing.
“Each reservation holder has gone through a full procurement process within their organization in order to sign the reservation document,” Dillon said. “So while the reservations are all fully cancelable, we are very confident in the seriousness of each one.”
U.S. Xpress has worked with TuSimple since 2019 and is an investor.
“We see them as the clear leader in autonomous trucking technology, which is why U.S. Xpress is among the first in line for reservations,” President and CEO Eric Fuller said.